June 19, 2015

Proposed DOL Fiduciary Rule May Be Denied Funding

In April, the Department of Labor proposed a new rule to reduce conflicts of interest among retirement plan advice providers. The new rule would expand the definition of fiduciary and limit the exemptions from the fiduciary standard, with both changes aimed at making sure that retirement plan investment professionals are providing advice based solely on their clients’ best interests.

However, a new House bill introduced in June may halt the DOL’s proposal in its tracks by refusing to fund the new regulation. This $153 billion House Appropriations Committee measure sets the 2016 budget for the Department of Labor, the Department of Health and Human Services, and a number of other agencies. The bill includes a rider that would prevent the DOL from spending any funds to finalize or implement the proposed rule.

Proponents of the DOL’s proposed rule suggest that the tactic is a political move by special interests. Opponents are concerned that the rule would increase liability risks and costs for brokers, making it more difficult for investors of modest means to gain access to advice.

A House subcommittee is expected to approve the Appropriations bill shortly, moving it on to the full panel.

The DOL, meanwhile, has been soliciting public comments prior to issuing a final rule, and this proposal has garnered quite a few comments. The majority of comments seek to extend the comment period by an additional 45 days (at this time, written comments must be submitted on or before July 6, 2015). Commenters note that the complexity of the proposal and breadth of the changes warrant deep analysis, which will require more time than the period allotted. Some commenters take a strong stance in favor of or against the rule; the proposal has generated a variety of reactions.

We are pleased that the DOL is working toward eliminating conflicts of interest and holding advisors to a higher fiduciary standard. Because we have always accepted fiduciary responsibility on behalf of our clients, the proposed rule will not impact how we provide advice. Since our inception, providing unbiased investment advice has been our core standard, and our fee structure is designed to ensure our interests are fully aligned with those of our clients.

You can read the comments on the proposed rule here:


Visit our previous blog post introducing and explaining the proposed rule here:


Read the DOL’s fact sheet on the proposed rule here: